What can I do to help my parent manage money? This is a question that, as a Brandon estate planning lawyer, I hear from adult children who are worried that their elderly parent can no longer handle their personal finances. Seniors often have financial difficulties because the ability to care for these matters declines with age. This can cause serious problems for the senior, including utilities being turned off, housing payments not made on time, and other bills being left unpaid.
Adult children are typically willing and able to help their parents manage their financial affairs, but jumping in and “taking over” is not as easy as it sounds. There are legal documents, and sometimes legal proceedings, that are necessary to make sure all the finances are handled correctly and that the adult child has the legal right to access information related to the senior.
Many adult children use a Power of Attorney document to help their elderly parents. The Power of Attorney names an agent – in this case, the adult child or even several adult children – to care for the senior’s financial concerns, including paying the bills, managing investments, and even making real estate deals. The agent has a legal duty to make sound financial decisions for their elderly parent.
A Revocable Living Trust is also a useful document that helps adult children handle financial affairs for their parent. When the Trust is created, the Grantor (parent) names themself as the Trustee to be in charge of all the assets and property in the Trust and also names a Successor Trustee (adult child) to serve if the original Trustee cannot carry out their duties. The parent can then turn control over to the Successor Trustee once they feel they can no longer handle their own affairs. Again, in this hcase, the Successor Trustee has a legal and fiduciary duty to only act in the best interest of the Grantor.
A Power of Attorney or Revocable Living Trust won’t be of any use if they are not signed before the senior becomes incapacitated. In this case, a legal proceeding is needed that grants control of an incapacitated person’s financial and health care concerns to a court-appointed conservator or guardian. Family members are usually named to these positions, but there have been times when an independent party is named by the court instead.
Do you want to learn additional ways to help your elderly parents manage their finances and plan for the future? We invite you to contact our office at (813) 438-8503 to schedule a complimentary initial consultation.